When it comes to Mergers and Acquisitions, one major contributor to the valuation process often gets overlooked: company culture.
The 3 Perils of Small Business Marketing
Let’s face it. Marketing sucks.
If you’re a successful business owner with revenues over $1 million, congratulations! You’ve probably solved a number of core business challenges: operations, finance, IT, customer service, sales, and even (if you’re lucky) HR.
But, regardless of how well-oiled the machine, your business probably suffers from anemic marketing. While most of us can sell, manage, and serve our customers, most business owners express frustration with their marketing efforts. Here are just a few comments I've heard over the last year:
"Marketing? Yeah, I’ve tried at least three marketing consultants and not one of them has brought an actual dollar’s worth of revenue into my business."
"We had a marketing person on staff; I realized that when she took a week off, I didn’t miss her."
"Sales are great. Marketing is terrible; we can’t get it dialed in."
Of course I’m talking about a very specific group of business leaders: owners who’ve crossed the $1 million revenue threshold, but haven’t reached the 8-figure mark. These owners run businesses big enough to really need marketing in order to grow, but aren't quite big enough to merit a full team in-house.
The truth is, until you reach that 8-figure mark, marketing done wrong will continue to hurt.
For the small business owner, failed marketing is either one or a combination of three issues: Strategy, Execution, and Accountability. Few businesses get all three right, and most are lucky to hit on just one.
Choices. We love ‘em, until we have too many. And when it comes to setting a marketing strategy, the options are simply overwhelming. Social media? Search engine marketing? Direct marketing? Trade Shows? Email? Networking?
Where is that marketing plan?!?! (Didn't we pay a consultant to write one three years ago? It's here...somewhere...)
Within the last five years, the marketing landscape has experienced a seismic shift. The old models of schmoozing on the golf course, placing ads in newspapers, and waiting for the phone to ring are increasingly irrelevant (hello, Yellow Pages?). Your customers congregate in entirely new ways, and their influence is more powerful than ever. Yet few of you have succeeded at adapting to the changing marketplace; many throw your hands up in frustration. And your dusty marketing plan doesn't work because it's a static document that doesn't adjust to the fast-moving pace of today's technology
Assuming you’ve got a decent strategy (or even a simple marketing framework), you’re faced with the challenge of how to get things done. Most owners are simply too busy running their business that there’s no time left to market what they do. While you may be great at sales, your business’ marketing engine is idling: that website that was supposed to take six months isn’t done a year later; the new product logo still hasn’t made if from an idea in your head to pencil and paper; the sales team still doesn’t have the tools they need to outshine your competition.
Most businesses circumvent the execution challenge with strong sales and personal networks. Unfortunately, this painful, “one new customer at a time” approach is usually only good enough to maintain current business levels. Accelerated growth means heavy marketing execution.
A few months ago a friend of mine pulled me aside and told me about a conversation she had with her CEO. When the discussion shifted to marketing, the CEO admitted that he wasn’t sure what the marketing department was doing. He thought they were, "doing good things," but couldn't quantify their contribution to the bottom line.
Unfortunately, this story is all too common: owners become disconnected from their internal marketing team (if they even have one) and there’s little transparency to marketing efforts. Owners are frustrated because they’re spending money on marketing, but can rarely point to the “wins” brought by the department.
Fixing the marketing mess
Tuning up (or even turning on) your marketing engine won’t happen overnight. However, with a little perseverance, you’ll start to see results. Here are my top 3 recommendations for beating the 3 marketing perils:
- Make your marketing strategy visual: Rather than writing a marketing plan (marketing plans seldom work), create an oversized poster that outlines your marketing opportunities; hang it in your “war room” and talk about your marketing on a regular basis – monthly or weekly. At Kinesis, we build a “Marketing Blueprint” for our clients – it’s a tool that maps Centers of Influence, Referrers, and Lead Sources. Segmenting your marketing efforts by these three areas is a great way to get your team thinking strategically about their marketing efforts.
- Build an execution rhythm: Set aside one day a week to address your marketing issues. Make it short and to the point, but take notes and assign action items. We recommend 30-60 minutes. Keep the meetings tactical (focused on getting things done) and save the big strategic meetings for your monthly sessions (2 hours). Once a year, set aside at least half a day to outline the goals for the year.
- Create a measurement tool: Owners typically measure their finances, evaluate their employees, and review sales numbers. But rarely do they spend the time to truly measure the impact of marketing. Fixing the problem starts with defining what metrics matter to your business. Then, religiously track your numbers. We’ve developed the Kinesis Metrics Dashboard for this purpose, but most businesses can make big strides with Excel and a few simple metrics.
Many of us start the year with a strategic planning session. If you haven’t had yours yet, consider setting aside time to discuss how 2012 could be different. If you make marketing strategy, execution, and accountability central to your business, you’ll go a long ways towards switching marketing from a source of pain to a source of revenue.